Investors often seek the expertise of experienced, proven traders in order to take advantage of:
1. Favorable trading track records.
2. A like-mindedness in investment practice (e.g. level of risk tolerance).
Track records of traders are generally available from websites that offer the services of traders, in some cases allowing the investor to select a trader to manage an investor's money or a trading system to copy or “mirror” trading activities, or opening an account that will mirror the trader or trader's trading activity. In some cases the level of risk (risk of loss) tolerance is requested from the investor only in broad terms (if at all) and expressed as a general category, such as “low risk”, “medium risk”, or “high risk”, or an arbitrary numerical scale, such as “1, 2, . . . 10”, with the inverse opportunities for return. This translates to inexact expectations, no precise degree of risk control, often disappointing results—and the possibility of a disastrous outcome with large losses. In other cases, an exact percentage of risk can be selected, but the selection never includes an option for a precise percentage of guarantee to cover (reimburse) that loss. Thus, investor's have always been exposed to some degree of loss; there is no mechanism to transfer that risk and, therefore, no possibility for complete risk control. Investors have had no systematized or automated way of seeking above-average returns in conjunction with expert, proven traders within a truly risk-controlled investing environment. Risk of loss exists with all investments. However, the risk can be controlled or even eliminated by transferring the risk to parties that are willing to accept it. In this way, both risk averse investors and speculative investors can be accommodated. Concurrently, traders often seek additional capital with which to invest, thereby multiplying their potential for favorable returns and to grow their businesses.
In conclusion, there remains a need for an automated system that intelligently matches and addresses the needs of all types of investors—conservative, moderate, and aggressive—as well as the needs of traders; providing an environment and investment accounts that strictly adhere to the investor's specific investing criteria, primarily level of risk tolerance including an option for a guarantee against losses and the inversely proportional potential for rewards, and concurrently provides a source of investor capital to traders. The present invention described herein addresses these needs, effectively creating a novel investment marketplace operating on the Internet that intelligently matches investors and traders in a mutually beneficial manner.